EA Sports and FIFA End Commercial DealMay 10, 2022, 08:00 AM
After months of intense negotiations between video game maker Electronic Arts, Inc. (“EA Sports”) and soccer’s global governing body, Fédération Internationale de Football Association (“FIFA”), the two parties were unable to agree to an extension of the current licensing agreement that underpins one of the most successful commercial partnerships in sports having generated more than $20 billion in sales over the last two decades.
While both FIFA and EA Sports have enjoyed immense success from the partnership, each party approached negotiations for the extension of the current agreement with differing interests. EA Sports desired to maintain its position as the exclusive licensee of FIFA for video games and eSports. Meanwhile, it has been reported that FIFA sought double the estimated $150 million current annual licensing fee from EA Sports while also wanting to shift the nature of the licensing agreement to non-exclusive—in other words, FIFA wanted to be able to license its name and rights to other video-game makers other than just EA Sports.
As recent years have seen technological advancements and more platform options develop in the video-game and eSports industry, FIFA apparently desired to not limit its licensing options and wanted to expand the number of licensing contracts for soccer-themed games. Meanwhile, EA Sports will continue to produce the same soccer video-game as always just under a new brand, EA Sports FC, with the same players and clubs that millions of global fans have enjoyed as EA Sports continues to directly license with those organizations, national federations and confederations (including UEFA) for the use of those respective image rights. However, the newly branded EA Sports FC will no longer have the in-game FIFA affiliation nor the FIFA branded tournaments, namely the FIFA World Cups.
Unfortunately, this is an example of how even longstanding, successful commercial partnerships can ultimately breakdown as parties’ interests shift over time and changing circumstances. FIFA has apparently prepared itself for this outcome with reported deals in the works with other video-game makers on different platforms. EA Sports, on the other hand, will move forward relying on the individual licensing agreements it continues to have in place with the direct entities represented in the video-game, some of which are exclusive while others are non-exclusive.